Euro-zone Manufacturing Rebounds; Romania Retained Key Rate

Arthi Gupta
02 Nov, 2010
New York City

The European indexes gained after euro area manufacturing activity improved in October. Romania Central Bank retained key rate at 6.25%. German manufacturing sector expanded and machinery orders surged. French manufacturing PMI dipped in October.

[R]4:00 PM Frankfurt – The European indexes gained after euro area manufacturing activity improved in October. Romania Central Bank retained key rate at 6.25%. German manufacturing sector expanded and machinery orders surged. French manufacturing PMI dipped in October.[/R]

U.S. stocks traded higher on optimism about the results of the midterm elections and Asian stocks traded mixed.

The IMF agreed to provide next bailout tranche of €0.9 billion to Romania. Spanish and Italian manufacturing sector expanded but Greece manufacturing sector contracted in October.

In Paris CAC 40 Index increased 31.72 or 0.83% to close at 3,827.73 and in Frankfurt DAX Index edged higher 57.12 or 0.86% to close at 6,661.98.

The International Monetary Fund on Monday agreed to provide the next loan installment worth €0.9 billion to Romania.

The IMF mission chief to Romania Jeffrey Franks said, ""Preliminary data for the third quarter suggest that the performance criteria were met, with the exception of the ceiling on general government arrears.""

Romania’s central bank on Tuesday decided to retain its key policy rate at 6.25% for a fourth consecutive rate-setting meeting. However, the monetary board decided to maintain the 2012 inflation target at 3% with a tolerance band of 1%, and to adopt a flat multi-annual inflation target of 2.5% with a tolerance interval of 1% from 2013.

According to survey results from Markit released today, euro-zone manufacturing activity improved more than initially estimated in October. Strong growth of output as well as new orders boosted overall manufacturing from an eight-month low.

The final Purchasing Managers'' Index for October rose to 54.6 in October from September''s eight-month low of 53.7. The flash estimate for October was 54.1.

Germany''s manufacturing sector expanded in October after a stronger rise in new orders, according to survey data from Markit Economics published today. The seasonally adjusted Markit/BME Purchasing Managers'' Index rose to 56.6 in October from 55.1 in September.

The robust improvement in the overall performance of the German manufacturing sector was mainly influenced by stronger gains in new work, the Markit said.

German machinery orders surged 28% annually in September, industry body VDMA said today. Orders from domestic market grew 33% annually, while export orders climbed 26%. In the July to September period, orders surged 40% compared to the same period last year. During the quarter, domestic orders rose 34% on an annual basis, while export orders increased 43%.

French manufacturing activity slowed in October as production growth eased to a fourteen-month low, according to a latest report from Markit Economics released today. The headline seasonally adjusted purchasing managers'' index slipped to 55.2 in October from 56 in September.

Greek manufacturing purchasing managers’ index decreased to 43.6 in October from 44.7 in September, according to a report released by the Markit Economics today. Greek manufacturers cut production more sharply in October as new orders continued to fall, instead using existing stocks of finished goods to meet new sales, Markit said.

Spanish manufacturing purchasing managers'' index rose to 51.2 in October from 49.6 in September, according to a survey by Markit Economics.

Italian manufacturing sector expanded at a faster pace in October, according to a report released by the Markit Economics today. The Markit/ADACI purchasing managers’ index increased to 53 in October from 52.6 in September.

The Czech Finance Ministry raised its economic growth forecast for the current year to 2.2% from 1.6% on improved outlook for household consumption, but lowered the growth estimate for next year to 2% from 2.3% reported earlier.

Poland’s Finance Ministry reported today that Polish inflation probably accelerated to 2.9% in October from 2.5% in September with the consumer price index recording a reading of 100.6. The rate of inflation in September was at the mid-point of the central bank''s target, while consumer prices climbed 2.5% for the first nine months of the year.

GE Capital, the financial services division of conglomerate General Electric Co. reached an agreement to sell an 18.6% stake in Turkey-based bank Turkiye Garanti Bankasi A.S to Spanish banking group, Banco Bilbao Vizcaya Argentaria, S.A. for $3.776 billion.

BBVA would also acquire a 6.3% stake in Garanti from Dogus Group, thereby acquiring a total of 24.9% stake of Garanti in a deal worth €4.2 billion.

Gainers & Losers

AstraZeneca PLC fell 0.40% to $50.23 after the biopharmaceutical company announced that results from TITAN, a 12-week study of SYMBICORT Inhalation Aerosol in African American patients with moderate to severe persistent asthma, showed significant improvement in lung function.

Basilea Pharmaceutica AG gained 0.37% to Sfr68.50 after the Switzerland-based research and development biopharmaceutical company received a milestone payment of €5.5 million under its distribution agreement for Toctino, or alitretinoin, with Almirall, S.A.

EDAP TMS S.A. plunged 4.82% to $2.17 after the developer and marketer of the Ablatherm device announced the successful completion of feasibility studies aimed at improving delivery of cancer drugs using a combination of ultrasound sensitive liposomes and High Intensity Focused Ultrasound or HIFU.

Daimler AG gained 1.68% to €48.46 after the German car corporation said it reached an agreement with a consortium of international banks on a €7 billion syndicated credit line with a term of five years on October 29. The consortium is comprised of more than 30 European, American and Asian banks.

Nokia Corp. dropped 2.72% to $10.73 after the mobile devices manufacturer announced the availability of Ovi Life Tools, its market information service, in Nigeria.

Playtech Limited climbed 0.40% to 439.00 pence after the gaming software development company in its trading update for the third quarter said total revenues grew 17% to €32.5 million from €27.7 million last year.